ex_99-1.htm

	Investor Relations:	Deborah Abraham
		Vice President, Investor Relations
		(212) 287-8289

FOR IMMEDIATE RELEASE

WARNACO REPORTS SECOND QUARTER 2010 RESULTS

Company Raises Fiscal 2010 Guidance

______________________________________________________________________

NEW YORK – August 5, 2010 -- The Warnaco Group, Inc. (NYSE: WRC) today reported results for the second quarter ended July 3, 2010.

Highlights for the quarter:

·	Net revenues were up 14% from the prior year quarter
·	Gross margin increased 270 basis points, to 44%, compared to the prior year quarter
·	Income per diluted share from continuing operations increased 63% to $0.65 compared to $0.40 in the prior year quarter which includes the benefit of approximately $0.07 from the effect of fluctuations in foreign currency exchange rates
·	Income per diluted share from continuing operations on an adjusted, non-GAAP basis was $0.71 compared to $0.47 in the prior year quarter (both of which exclude restructuring expenses, pension expense, costs related to repurchase of debt, certain tax related items and other items)
·	The Company redeemed the remaining $110.9 million of its 8-7/8% Senior Notes on June 15, 2010
·	The Company’s Board of Directors approved a new five million share stock repurchase plan

The accompanying tables provide a reconciliation of actual results to the adjusted, non-GAAP, results.

The Company believes it is valuable for users of the Company’s financial statements to be made aware of the adjusted financial information, as such measures are used by management to evaluate the operating performance of the Company’s continuing businesses on a comparable basis and to make operating and strategic decisions. In addition, the Company uses performance targets based, in part, on non-GAAP operating income and diluted earnings per share from continuing operations as a component of the measurement of employee incentive compensation.

“We are very pleased with our second quarter results, which reflect the ongoing success of our global growth strategies,” commented Joe Gromek, Warnaco’s President and Chief Executive Officer. “Broad based increases in our global Calvin Klein businesses, bolstered by the ongoing success of the Calvin Klein X Underwear campaign, complemented by gains in our heritage businesses drove double digit increases in net revenues, substantial improvements in gross margin and a significant increase in earnings per share. Key to our success has been the ongoing focus on innovative product and marketing that speak to the needs of our customers around the globe.”

“We believe that great product, combined with our disciplined execution across all facets of our business, from design to supply chain to sales and marketing, leave us well positioned to continue the favorable momentum in our business. With strong wholesale bookings and continued positive results from our direct-to-consumer expansion, we look forward to a powerful second half.”

“As we look further ahead, we believe our powerful brands, strong balance sheet and diversified global operations provide us with a unique platform from which to sustain long-term revenue and profit growth for the benefit of all Warnaco stakeholders,” concluded Mr. Gromek.

Fiscal 2010 Outlook

Based on its positive first half results and outlook for the balance of the year, the Company is again raising its 2010 earnings outlook. For fiscal 2010, on an adjusted non-GAAP basis (excluding restructuring expense, pension expense, cost related to repurchase of debt and certain tax related items):

	·	The Company currently anticipates net revenues will increase 9% - 11% compared to fiscal 2009
	·	The Company now expects diluted earnings per share from continuing operations in the range of $3.40 - $3.50
	·	The Company’s prior guidance was for net revenue growth in the range of 8% - 10% compared to fiscal 2009 and diluted earnings per share from continuing operations in the range of $3.30 - $3.40.

Schedule 7 of the accompanying tables provide a reconciliation of expected diluted earnings per share from continuing operations, on a GAAP basis of $3.28 - $3.36 (assuming minimal pension expense), to the adjusted fiscal 2010 outlook above.

Second Quarter 2010 Highlights

Net revenues rose 14% in the quarter to $519.3 million. All three segments (Sportswear Group, Intimate Apparel Group and Swimwear Group) and all key geographies in which we operate contributed to the growth. New product launches and ongoing global expansion

drove mid-teens revenue growth in the Company’s Calvin Klein businesses, and was complemented by mid-teens revenue growth in Chaps, primarily reflecting its expanded distribution.

Gross margin increased 270 basis points, to 44% of net revenues, compared to the prior year quarter, driven by strong sell through and higher margin associated with expansion in our direct to consumer and international operations. Selling, general and administrative expense (SG&A), as expected, increased compared to the prior year quarter. The increase of $26.6 million to $171.9 million, primarily reflects planned investments in direct-to-consumer operations, marketing, infrastructure and costs associated with performance-based employee compensation. SG&A as a percent of net revenues increased 120 basis points to 33% compared to the prior year quarter.

Operating income increased 35% to $55.3 million compared to $41.0 million in the prior year quarter.

The Company recorded income from continuing operations of $30.0 million, or $0.65 per diluted share in the quarter, compared to $18.6 million, or $0.40 per diluted share, in the prior year quarter.

Income from continuing operations, on an adjusted non-GAAP basis (excluding costs related to restructuring expenses, pension expense, costs related to repurchase of debt, certain tax related items and other items), as detailed in the accompanying schedules, was $0.71 per diluted share in the quarter compared to $0.47 per diluted share in the prior year quarter.

The effect of fluctuations in foreign currency exchange rates increased fiscal 2010 second quarter net revenues, gross profit, and operating profit by approximately $5 million, $8 million, and $9 million, respectively, and increased income from continuing operations by approximately $0.07 per diluted share.

Balance Sheet

At July 3, 2010 the Company had a net cash (cash and cash equivalents net of total debt) position of $107.7 million, compared to a net debt position of $44.3 million at July 4, 2009.

During the quarter, the Company redeemed the remaining $110.9 million of its 8-7/8% Senior Notes due 2013.

Cash and cash equivalents at July 3, 2010 were $172.9 million, a decrease of $4.7 million, compared to $177.6 million at July 4, 2009.

Inventories at July 3, 2010 were $277.6 million, a decrease of $14.0 million, or 5%, compared to $291.6 million at July 4, 2009. Disciplined planning and inventory management contributed to the year over year decline and resulted in an enhanced quality of inventory at July 3, 2010.

Conference Call Information

Stockholders and other persons are invited to listen to the second quarter 2010 earnings conference call scheduled for today, Thursday, August 5, 2010, at 4:30 p.m. EDT. To participate in Warnaco’s conference call, dial (877) 692-2592 approximately five minutes prior to the 4:30 p.m. start time. The call will also be broadcast live over the Internet at www.warnaco.com. An online archive will be available following the call.

This press release was furnished to the SEC (www.sec.gov) and may also be accessed through the Company’s internet website: www.warnaco.com.

ABOUT WARNACO

The Warnaco Group, Inc., headquartered in New York, is a leading global apparel company engaged in the business of designing, sourcing, marketing and selling men’s, women’s and children’s sportswear and accessories, swimwear and intimate apparel under such owned and licensed brands as Calvin Klein®, Speedo®, Chaps®, and Warner's® and Olga®.

FORWARD-LOOKING STATEMENTS

The Warnaco Group, Inc. notes that this press release, the conference call scheduled for August 5, 2010 and certain other written, electronic and oral disclosure made by the Company from time to time, may contain forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements involve risks and uncertainties and reflect, when made, the Company's estimates, objectives, projections, forecasts, plans, strategies, beliefs, intentions, opportunities and expectations. Actual results may differ materially from anticipated results, targets or expectations and investors are cautioned not to place undue reliance on any forward-looking statements. Statements other than statements of historical fact, including, without limitation, future financial targets, are forward-looking statements. These forward-looking statements may be identified by, among other things, the use of forward-looking language, such as the words "believe," "anticipate," "estimate," "expect," "intend," "may," "project," "scheduled to," "seek," "should," "will be," "will continue," "will likely result," “targeted”, or the negative of those terms, or other similar words and phrases or by discussions of intentions or strategies.

The following factors, among others and in addition to those described in the Company's reports filed with the SEC (including, without limitation, those described under the headings "Risk Factors" and "Statement Regarding Forward-Looking Disclosure," as such disclosure may be modified or supplemented from time to time), could cause the Company's actual results to differ materially from those expressed in any forward-looking statements made by it: the Company's ability to execute its repositioning and sale initiatives (including achieving enhanced productivity and profitability) previously announced; economic conditions that affect the apparel industry, including the recent turmoil in the financial and credit markets; the Company's failure to anticipate, identify or promptly react to changing trends, styles, or brand preferences; further declines in prices in the apparel industry; declining sales resulting from increased competition in the Company’s markets; increases in the prices of raw materials; events which result in difficulty in procuring or producing the Company's products on a cost-effective basis; the effect of laws and regulations, including those relating to labor, workplace and the environment; possible additional tax liabilities; changing international trade regulation, including as it relates to the imposition or elimination of quotas on imports of textiles and apparel; the Company’s ability to protect its intellectual property or the costs incurred by the Company related thereto; the risk of product safety issues, defects or other production problems associated with our products; the Company’s dependence on a limited number of customers; the effects of consolidation in the retail sector; the Company’s dependence on license agreements with third parties; including, in particular, its license agreements with Calvin Klein Inc., the licensor of the Company’s Calvin Klein brand name; the Company’s dependence on the reputation of its brand names, including, in particular, Calvin Klein; the Company’s exposure to conditions in overseas markets in connection with the Company’s foreign operations and the sourcing of products from foreign third-party vendors; the Company's foreign currency exposure; the Company’s history of insufficient disclosure controls and procedures and internal controls and restated financial statements; unanticipated future internal control deficiencies or weaknesses or ineffective disclosure controls and procedures; the effects of fluctuations in the value of investments of the Company’s pension plan; the sufficiency of cash to fund operations, including capital expenditures; the Company's ability to service its indebtedness, the effect of changes in interest rates on the Company's indebtedness that is subject to floating interest rates and the limitations imposed on the Company's operating and financial flexibility by the agreements governing the Company's indebtedness; the Company’s dependence on its senior management team and other key personnel; the Company’s reliance on information technology; the limitations on purchases under the Company's share repurchase program contained in the Company's debt instruments, the number of shares that the Company purchases under such program and the prices paid for such shares; the Company’s inability to achieve its financial targets and strategic objectives, as a result of one or more of the factors described above, changes in the assumptions underlying the targets or goals, or otherwise; the failure of acquired businesses to generate expected levels of revenues; the failure of the Company to successfully integrate such businesses with its existing businesses (and as a result, not achieving all or a substantial portion of the anticipated benefits of such acquisitions); and such acquired businesses being adversely affected, including by one or more of the factors described above and thereby failing to achieve anticipated revenues and earnings growth.

The Company encourages investors to read the section entitled "Risk Factors" and the discussion of the Company's critical accounting policies under "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Discussion of Critical Accounting Policies" included in the Company's Annual Report on Form 10-K, as such discussions may be modified or supplemented by subsequent reports that the Company files with the SEC. The discussion in this press release is not exhaustive but is designed to highlight important factors that may affect actual results. Forward-looking statements speak only as of the date on which they are made, and, except for the Company's ongoing obligation under the U.S. federal securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Schedule 1

THE WARNACO GROUP, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(Dollars in thousands, excluding per share amounts)

(Unaudited)

	Three Months Ended						Six Months Ended
	July 3, 2010			July 4, 2009			July 3, 2010			July 4, 2009


Net revenues	$	519,334		$	455,432		$	1,107,498		$	993,275
Cost of goods sold		289,592			266,432			610,638			578,990
Gross profit		229,742			189,000			496,860			414,285
Selling, general and administrative expenses		171,860			145,256			356,833			303,603
Amortization of intangible assets		2,586			2,151			5,254			4,278
Pension expense (income)		(22	)		594			(43	)		1,131
Operating income		55,318			40,999			134,816			105,273
Other loss		5,730			2,799			7,550			2,395
Interest expense		4,259			5,799			9,237			11,868
Interest income		(487	)		(416	)		(1,493	)		(824	)
Income from continuing operations before provision
for income taxes and noncontrolling interest		45,816			32,817			119,522			91,834
Provision for income taxes		15,789			13,263			41,183			33,430
Income from continuing operations before noncontrolling interest		30,027			19,554			78,339			58,404
(Loss) from discontinued operations, net of taxes		(93	)		(882	)		(430	)		(1,903	)
Net income		29,934			18,672			77,909			56,501
Less: Net income attributable to the noncontrolling interest		-			(912	)		-			(1,170	)
Net income attributable to Warnaco Group, Inc.	$	29,934		$	17,760		$	77,909		$	55,331

Amounts attributable to Warnaco Group, Inc. common shareholders:

Income from continuing operations, net of tax	$	30,027		$	18,642		$	78,339		$	57,234
Discontinued operations, net of tax		(93	)		(882	)		(430	)		(1,903	)
Net income	$	29,934		$	17,760		$	77,909		$	55,331


Basic income per common share attributable to Warnaco Group, Inc. common shareholders:
Income from continuing operations	$	0.67		$	0.41		$	1.72		$	1.25
(Loss) from discontinued operations		(0.01	)		(0.02	)		(0.01	)		(0.04	)
Net income	$	0.66		$	0.39		$	1.71		$	1.21

Diluted income per common share attributable to Warnaco Group, Inc. common shareholders:
Income from continuing operations	$	0.65		$	0.40		$	1.68		$	1.23
(Loss) from discontinued operations		-			(0.02	)		(0.01	)		(0.04	)
Net income	$	0.65		$	0.38		$	1.67		$	1.19

Weighted average number of shares outstanding used in computing income per common share:
Basic		44,468,794			45,412,175			44,943,829			45,356,680
Diluted		45,426,632			46,010,870			45,936,496			45,879,453

Schedule 2

THE WARNACO GROUP, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(Dollars in thousands)

(Unaudited)

	July 3, 2010		January 2, 2010		July 4, 2009

ASSETS
Current assets:
Cash and cash equivalents	$	172,863	$	320,754	$	177,633
Accounts receivable, net		304,328		290,737		281,400
Inventories		277,565		253,362		291,578
Assets of discontinued operations		1,426		2,172		373
Other current assets		144,898		135,832		158,630
Total current assets		901,080		1,002,857		909,614

Property, plant and equipment, net		119,952		120,491		115,387
Intangible and other assets		495,019		536,446		470,758

TOTAL ASSETS	$	1,516,051	$	1,659,794	$	1,495,759

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt and current portion of Senior Notes	$	65,203	$	97,873	$	58,807
Accounts payable and accrued liabilities		319,334		312,074		272,654
Taxes		30,679		24,723		7,831
Liabilities of discontinued operations		8,556		8,018		11,363
Total current liabilities		423,772		442,688		350,655
Long-term debt		-		112,835		163,130
Other long-term liabilities		191,661		188,161		122,699
Total stockholders' equity		900,618		916,110		859,275

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,516,051	$	1,659,794	$	1,495,759

NET CASH AND CASH EQUIVALENTS (NET DEBT)	$	107,660	$	110,046	$	(44,304	)

Schedule 3

THE WARNACO GROUP, INC.

NET REVENUES AND OPERATING INCOME BY SEGMENT

(Dollars in thousands)

(Unaudited)

Net revenues:	Three Months Ended			Three Months Ended		Increase /			`	Constant $
	July 3, 2010			July 4, 2009		(Decrease)			Change	% Change (a)
Sportswear Group	$	244,044		$	212,057	$	31,987		15.1%	13.1%
Intimate Apparel Group		199,116			168,954		30,162		17.9%	17.6%
Swimwear Group		76,174			74,421		1,753		2.4%	2.1%
Net revenues	$	519,334		$	455,432	$	63,902		14.0%	13.0%

	Three Months Ended			% of Group		Three Months Ended			% of Group
	July 3, 2010			Net Revenues		July 4, 2009			Net Revenues
Operating income (loss):
Sportswear Group (b), (c)	$	24,987		10.2%		$	13,320		6.3%
Intimate Apparel Group (b), (c)		34,563		17.4%			27,523		16.3%
Swimwear Group (b), (c)		8,824		11.6%			8,238		11.1%
Unallocated corporate expenses (c)		(13,056	)	na			(8,082	)	na
Operating income	$	55,318		na		$	40,999		na

Operating income as a percentage of
total net revenues		10.7%					9.0%

(a) Reflects the percentage increase (decrease) in net revenues for the Three Months Ended July 3, 2010, compared to the Three Months Ended July 4, 2009, assuming foreign based net revenues for the Three Months Ended July 3, 2010 are translated into U.S. dollars using the same foreign currency exchange rates that were used in the calculation of net revenues for the Three Months Ended July 4, 2009. See Schedule 8.

(b) Includes an allocation of shared services expenses as follows:

	Three Months Ended		Three Months Ended
	July 3, 2010		July 4, 2009
Sportswear Group	$	5,205	$	5,081
Intimate Apparel Group	$	3,931	$	3,805
Swimwear Group	$	2,558	$	2,649

	Three Months Ended		Three Months Ended
	July 3, 2010		July 4, 2009
Sportswear Group	$	549	$	352
Intimate Apparel Group		160		311
Swimwear Group		445		852
Unallocated corporate expenses		-		(41	)
	$	1,154	$	1,474

Schedule 3a

THE WARNACO GROUP, INC.

NET REVENUES AND OPERATING INCOME BY SEGMENT

(Dollars in thousands)

(Unaudited)

Net revenues:	Six Months Ended			Six Months Ended		Increase /			`	Constant $
	July 3, 2010			July 4, 2009		(Decrease)			Change	% Change (a)
Sportswear Group	$	550,390		$	481,114	$	69,276		14.4%	9.9%
Intimate Apparel Group		393,058			341,777		51,281		15.0%	12.4%
Swimwear Group		164,050			170,384		(6,334	)	-3.7%	-4.8%
Net revenues	$	1,107,498		$	993,275	$	114,223		11.5%	8.2%

	Six Months Ended			% of Group		Six Months Ended			% of Group
	July 3, 2010			Net Revenues		July 4, 2009			Net Revenues
Operating income (loss):
Sportswear Group (b), (c)	$	75,929		13.8%		$	50,789		10.6%
Intimate Apparel Group (b), (c)		68,181		17.3%			57,921		16.9%
Swimwear Group (b), (c)		20,709		12.6%			20,783		12.2%
Unallocated corporate expenses (c)		(30,003	)	na			(24,220	)	na
Operating income	$	134,816		na		$	105,273		na

Operating income as a percentage of
total net revenues		12.2%					10.6%

(a) Reflects the percentage increase (decrease) in net revenues for the Six Months Ended July 3, 2010, compared to the Six Months Ended July 4, 2009, assuming foreign based net revenues for the Six Months Ended July 3, 2010 are translated into U.S. dollars using the same foreign currency exchange rates that were used in the calculation of net revenues for the Six Months Ended July 4, 2009. See Schedule 8a.

(b) Includes an allocation of shared services expenses as follows:

	Six Months Ended		Six Months Ended
	July 3, 2010		July 4, 2009
Sportswear Group	$	10,400	$	10,108
Intimate Apparel Group	$	7,856	$	7,548
Swimwear Group	$	5,130	$	5,264

	Six Months Ended		Six Months Ended
	July 3, 2010		July 4, 2009
Sportswear Group	$	442	$	3,388
Intimate Apparel Group		113		2,912
Swimwear Group		714		2,433
Unallocated corporate expenses		844		1,312
	$	2,113	$	10,045

Schedule 4

THE WARNACO GROUP, INC.

NET REVENUES AND OPERATING INCOME BY REGION

(Dollars in thousands)

(Unaudited)

By Region:	Net Revenues
	Three Months Ended July 3, 2010			Three Months Ended July 4, 2009			Increase / (Decrease)			% Change	Constant $ % Change (a)
United States	$	261,964		$	232,320		$	29,644		12.8%	12.8%
Europe		99,831			98,274			1,557		1.6%	8.6%
Asia		83,492			70,214			13,278		18.9%	13.5%
Canada		29,866			29,226			640		2.2%	-8.1%
Mexico, Central and South America		44,181			25,398			18,783		74.0%	55.3%
Total	$	519,334		$	455,432		$	63,902		14.0%	13.0%


	Operating Income
	Three Months Ended July 3, 2010 (b)			Three Months Ended July 4, 2009 (b)			Increase / (Decrease)			% Change
United States	$	41,586		$	34,251		$	7,335		21.4%
Europe		(683	)		1,552			(2,235	)	-144.0%
Asia		13,353			5,703			7,650		134.1%
Canada		5,082			4,008			1,074		26.8%
Mexico, Central and South America		9,036			3,567			5,469		153.3%
Unallocated corporate expenses		(13,056	)		(8,082	)		(4,974	)	61.5%
Total	$	55,318		$	40,999		$	14,319		34.%9

(b) Includes restructuring charges as follows:

	Three Months Ended July 3, 2010		Three Months Ended July 4, 2009
United States	$	434	$	743
Europe		300		535
Asia		362		(2	)
Canada		-		239
Mexico, Central and South America		58		-
Unallocated corporate expenses		-		(41	)
Total	$	1,154	$	1,474

Schedule 4a

THE WARNACO GROUP, INC.

NET REVENUES AND OPERATING INCOME BY REGION

(Dollars in thousands)

(Unaudited)

By Region:	Net Revenues
	Six Months Ended July 3, 2010			Six Months Ended July 4, 2009			Increase / (Decrease)			% Change	Constant $ % Change (a)
United States	$	532,714		$	502,064		$	30,650		6.1%	6.1%
Europe		257,133			240,989			16,144		6.7%	5.9%
Asia		180,565			152,393			28,172		18.5%	10.1%
Canada		55,362			49,923			5,439		10.9%	-3.2%
Mexico, Central and South America		81,724			47,906			33,818		70.6%	48.4%
Total	$	1,107,498		$	993,275		$	114,223		11.5%	8.2%


	Operating Income
	Six Months Ended July 3, 2010 (b)			Six Months Ended July 4, 2009 (b)			Increase / (Decrease)			% Change
United States	$	86,274		$	76,817		$	9,457		12.3%
Europe		21,832			19,946			1,886		9.5%
Asia		32,529			19,784			12,745		64.4%
Canada		8,703			6,866			1,837		26.8%
Mexico, Central and South America		15,481			6,080			9,401		154.6%
Unallocated corporate expenses		(30,003	)		(24,220	)		(5,783	)	23.9%
Total	$	134,816		$	105,273		$	29,543		28.1%

(a) Reflects the percentage increase (decrease) in net revenues for the Six Months Ended April 3, 2010, compared to the Six Months Ended April 4, 2009, assuming foreign based net revenues for the Six Months Ended April 3, 2010 are translated into U.S. dollars using the same foreign currency exchange rates that were used in the calculation of net revenues for the Six Months Ended April 4, 2009. See schedule 8a.

(b) Includes restructuring charges as follows:

	Six Months Ended July 3, 2010			Six Months Ended July 4, 2009
United States	$	643		$	4,860
Europe		361			3,582
Asia		362			9
Canada		-			252
Mexico, Central and South America		(97	)		30
Unallocated corporate expenses		844			1,312
Total	$	2,113		$	10,045

Schedule 5

THE WARNACO GROUP, INC.

NET REVENUES AND OPERATING INCOME BY CHANNEL

(Dollars in thousands)

(Unaudited)

By Channel:	Net Revenues
	Three Months Ended July 3, 2010			Three Months Ended July 4, 2009			Increase / (Decrease)			% Change
Wholesale	$	392,918		$	349,798		$	43,120		12.3%
Retail		126,416			105,634			20,782		19.7%
Total	$	519,334		$	455,432		$	63,902		14.0%


	Operating Income
	Three Months Ended July 3, 2010 (a)			Three Months Ended July 4, 2009 (a)			Increase / (Decrease)			% Change
Wholesale	$	54,804		$	38,187		$	16,617		43.5%
Retail		13,570			10,894			2,676		24.6%
Unallocated corporate expenses		(13,056	)		(8,082	)		(4,974	)	61.5%
Total	$	55,318		$	40,999		$	14,319		34.9%

(a) Includes restructuring charges as follows:

	Three Months Ended July 3, 2010		Three Months Ended July 4, 2009
Wholesale	$	1,025	$	1,336
Retail		129		179
Unallocated corporate expenses		-		(41	)
Total	$	1,154	$	1,474

Schedule 5a

THE WARNACO GROUP, INC.

NET REVENUES AND OPERATING INCOME BY CHANNEL

(Dollars in thousands)

(Unaudited)

By Channel:	Net Revenues
	Six Months Ended July 3, 2010			Six Months Ended July 4, 2009			Increase / (Decrease)			% Change
Wholesale	$	857,030		$	793,464		$	63,566		8.0%
Retail		250,468			199,811			50,657		25.4%
Total	$	1,107,498		$	993,275		$	114,223		11.5%


	Operating Income
	Six Months Ended July 3, 2010 (a)			Six Months Ended July 4, 2009 (a)			Increase / (Decrease)			% Change
Wholesale	$	142,660		$	113,130		$	29,530		26.1%
Retail		22,159			16,363			5,796		35.4%
Unallocated corporate expenses		(30,003	)		(24,220	)		(5,783	)	23.9%
Total	$	134,816		$	105,273		$	29,543		28.1%

(a) Includes restructuring charges as follows:

	Six Months Ended July 3, 2010			Six Months Ended July 4, 2009
Wholesale	$	1,295		$	8,295
Retail		(26	)		438
Unallocated corporate expenses		844			1,312
Total	$	2,113		$	10,045

Schedule 6

THE WARNACO GROUP, INC.

NON-GAAP MEASURES

(Dollars in thousands, excluding per share amounts)

(Unaudited)

The Company’s reported financial results are presented in accordance with U.S. generally accepted accounting principles (“GAAP”). The reported operating income, income from continuing operations and diluted earnings per share from continuing operations reflect certain items which affect the comparability of those reported results. Those financial results are also presented on a non-GAAP basis, as defined by Regulation S-K section 10(e) issued by the Securities and Exchange Commission to exclude the effect of these items. The Company’s computation of these non-GAAP measures may vary from others in its industry. These non-GAAP financial measures are not intended to be, and should not be, considered in isolation from or as a substitute for the most directly comparable GAAP financial measure to which they are reconciled, as presented in the following table:

	Three Months Ended					Six Months Ended
	July 3, 2010		July. 4, 2009			July 3, 2010		July 4, 2009
	(Dollars in thousands, except per share amounts)


Operating income, as reported (GAAP)	$	55,318	$	40,999		$	134,816	$	105,273
Restructuring charges, other exit costs and pension (a)		1,132		2,068			2,070		11,176
Other (b)		-		(260	)		-		(520	)
Operating income, as adjusted (non-GAAP)	$	56,450	$	42,807		$	136,886	$	115,929

Income from continuing operations, as reported (GAAP)	$	30,027	$	18,642		$	78,339	$	57,234
Restructuring charges, other exit costs and pension, net of taxation (c)		858		1,430			1,340		7,923
Costs related to the redemption of Debt, net of taxation (d)		1,354		-			2,368		-
Other item, net of taxation (b)		-		(156	)		-		(312	)
Taxation (e)		446		2,059			1,554		1,731
Income from continuing operations, as adjusted (non-GAAP)	$	32,685	$	21,975		$	83,601	$	66,576

Diluted earnings per share from continuing operations, as reported (GAAP)	$	0.65	$	0.40		$	1.68	$	1.23
Restructuring charges, other exit costs and pension, net of taxation		0.02		0.03			0.03		0.17
Costs related to the redemption of Debt, net of taxation		0.03		-			0.05		-
Taxation		0.01		0.04			0.04		0.04
Diluted earnings per share from continuing operations, as adjusted (non-GAAP)	$	0.71	$	0.47		$	1.80	$	1.44

(a)	This adjustment seeks to present the Company's Consolidated Condensed Statements of Operations on a continuing basis without the effects of restructuring charges and other exit costs of $1,154 and $1,474 for the Three Months Ended July 3, 2010 and July 4, 2009, respectively, and $2,113 and $10,045 for the Six Months Ended July 3, 2010 and July 4, 2009, respectively, and pension (income) expense of $(22) and $594 for the Three Months Ended July 3, 2010 and July 4, 2009, respectively, and $(43) and $1,131 for the Six Months Ended July 3, 2010 and July 4, 2009, respectively.

(b)	This adjustment seeks to present the Company's Consolidated Condensed Statements of Operations on a continuing basis with an additional charge of $156 (net of a $104 tax benefit) and $312 (net of a $208 tax benefit) for the Three Months and Six Months Ended July 4, 2009 for amortization expense related to the correction of amounts recorded in prior periods in connection with the recapture of cancellation of indebtedness income.

(c)	Adjustment to reflect the items in (a), above, net of income tax effects of $274 and $638 for the Three Months Ended July 3, 2010 and the Three Months Ended July 4, 2009, respectively, and $730 and $3,253 for the Six Months Ended July 3, 2010 and the Six Months Ended July 4, 2009, respectively.

(d)	This adjustment seeks to present the Company's Consolidated Condensed Statements of Operations on a continuing basis without the effects of charges of $2,055, net of income tax effects of $701and charges of $3,747, net of income tax effects of $1,379, related to the repurchase of a portion of its Senior Notes during the Three Months and Six Months Ended July 3, 2010, respectively.

(e)	Adjustment to reflect the Company's income from continuing operations at tax rates of 33.3% and 33.9%, which reflect the Company's normalized tax rates for Fiscal 2010 and Fiscal 2009, respectively, excluding the effect of restructuring charges, pension expense, charges related to the repurchase of Senior Notes during the Three and Six Months Ended July 3, 2010 and ceratin other tax related items.

The Company believes it is valuable for users of its financial statements to be made aware of the non-GAAP financial measures, as such measures are used by management to evaluate the operating performance of the Company's continuing businesses on a comparable basis and to make operating and strategic decisions. Such non-GAAP measures will also enhance users’ ability to analyze trends in the Company’s business. In addition, the Company uses performance targets based, in part, on these non-GAAP measures as a component of the measurement of employee incentive compensation.

Schedule 7

THE WARNACO GROUP, INC.

SUPPLEMENTAL SCHEDULE - FISCAL 2010 OUTLOOK

(Unaudited)

NET REVENUE GUIDANCE	Percentages

Estimated increase in net revenues in Fiscal 2010 compared to
comparable Fiscal 2009 levels.		9.00%	to		11.00%



EARNINGS PER SHARE GUIDANCE	U.S. Dollars
Diluted Income per common share from continuing operations
GAAP basis (assuming minimal pension expense / income)	$	3.28	to	$	3.36
Restructuring charges (a)		0.04	to		0.06
Costs to repurchase Senior Notes		0.05	to		0.05
Tax items		0.03	to		0.03
As adjusted (Non-GAAP basis) (b)	$	3.40	to	$	3.50

(a)	Reflects between $2.1 million to $2.7 million of expected restructuring charges (net of an income tax benefit of between $1.0 million and $1.4 million) for Fiscal 2010.

(b)	The Company believes it is useful for users of its financial statements to be made aware of the "As Adjusted" (non-GAAP) forecasted diluted income per common share from continuing operations as this is one of the measures used by management to evaluate the operating performance of the Company's continuing businesses on a comparable basis. The Company believes that this non-GAAP measure will also enhance users’ ability to analyze trends in the Company’s business. In addition, the Company uses performance targets based, in part, on this non-GAAP measure as a component of the measurement of employee incentive compensation. Management does not, nor should investors, consider this non-GAAP financial measure in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

Schedule 8

THE WARNACO GROUP, INC.

SUPPLEMENTAL SCHEDULE

NET REVENUES ON A CONSTANT CURRENCY BASIS

(Dollars in thousands)

(Unaudited)

	Three Months Ended July 3, 2010
	GAAP		Impact of Foreign			Non-GAAP (Note 1)
	As Reported		Currency Exchange			Constant Currency
By Segment:
Sportswear Group	$	244,044	$	4,057		$	239,987
Intimate Apparel Group		199,116		577			198,539
Swimwear Group		76,174		142			76,032
Net revenues	$	519,334	$	4,776		$	514,558


By Region:
United States	$	261,964	$	-		$	261,964
Europe		99,831		(6,844	)		106,675
Asia		83,492		3,881			79,611
Canada		29,866		3,007			26,859
Mexico, Central and South America		44,181		4,732			39,449
Total	$	519,334	$	4,776		$	514,558

Note 1:

The Warnaco Group, Inc. is a global company that reports financial information in U.S. dollars in accordance with GAAP. Foreign currency exchange rate fluctuations affect the amounts reported by the Company from translating its foreign revenues into U.S. dollars. These rate fluctuations can have a significant effect on reported operating results. As a supplement to our reported operating results, we present constant currency financial information, which is a non-GAAP financial measure. We use constant currency information to provide a framework to assess how our businesses performed excluding the effects of changes in foreign currency translation rates. Management believes this information is useful to investors to facilitate comparisons of operating results and better identify trends in our businesses.

To calculate the increase in segment revenues on a constant currency basis, net revenues for the current year period for entities reporting in currencies other than the U.S. dollar are translated into U.S.dollars at the average exchange rates in effect during the comparable period of the prior year (rather than the actual exchange rates in effect during the current year period).

These constant currency performance measures should be viewed in addition to, and not in isolation from, or as a substitute for, our operating performance measures calculated in accordance with GAAP. The constant currency information presented may not be comparable to similarly titled measures reported by other companies.

Schedule 8a

THE WARNACO GROUP, INC.

SUPPLEMENTAL SCHEDULE

NET REVENUES ON A CONSTANT CURRENCY BASIS

(Dollars in thousands)

(Unaudited)

	Six Months Ended July 3, 2010
	GAAP		Impact of Foreign		Non-GAAP*
	As Reported		Currency Exchange		Constant Currency
By Segment:
Sportswear Group	$	550,390	$	21,177	$	529,213
Intimate Apparel Group		393,058		9,521		383,537
Swimwear Group		164,050		1,748		162,302
Net revenues	$	1,107,498	$	32,446	$	1,075,052


By Region:
United States	$	532,714	$	-	$	532,714
Europe		257,133		1,989		255,144
Asia		180,565		12,780		167,785
Canada		55,362		7,051		48,311
Mexico, Central and South America		81,724		10,626		71,098
Total	$	1,107,498	$	32,446	$	1,075,052

* See Note 1 on Schedule 8